Paradox Interactive AB (publ) Just Missed EPS By 6.6%: Here's What Analysts Think Will Happen Next

Paradox Interactive AB (publ) (STO:PDX) missed earnings with its latest quarterly results, disappointing overly-optimistic forecasters. Paradox Interactive missed analyst forecasts, with revenues of kr464m and statutory earnings per share (EPS) of kr1.17, falling short by 2.5% and 6.6% respectively. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

We've discovered 1 warning sign about Paradox Interactive. View them for free.

After the latest results, the five analysts covering Paradox Interactive are now predicting revenues of kr2.56b in 2025. If met, this would reflect a solid 17% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to shrink 4.0% to kr5.28 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of kr2.64b and earnings per share (EPS) of kr5.88 in 2025. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a substantial drop in earnings per share numbers.

Check out our latest analysis for Paradox Interactive

Despite the cuts to forecast earnings, there was no real change to the kr214 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Paradox Interactive analyst has a price target of kr250 per share, while the most pessimistic values it at kr160. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Paradox Interactive's growth to accelerate, with the forecast 23% annualised growth to the end of 2025 ranking favourably alongside historical growth of 11% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 2.1% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Paradox Interactive is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Paradox Interactive. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Paradox Interactive going out to 2027, and you can see them free on our platform here..

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Paradox Interactive that you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.